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Wagner's law revisited: cointegration and exogeneity tests for the USA

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  • Anisul Islam

Abstract

This paper re-examines Wagner's hypothesis of an expanding government sector with progress of the economy using advanced econometric techniques such as cointegration and exogeneity tests not used in previous empirical studies. This study also uses much longer time series data for the USA than previously utilized. The empirical results based on cointegration and exogeneity tests provide strong support for the hypothesis for the USA.

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  • Anisul Islam, 2001. "Wagner's law revisited: cointegration and exogeneity tests for the USA," Applied Economics Letters, Taylor & Francis Journals, vol. 8(8), pages 509-515.
    • Handle: RePEc:taf:apeclt:v:8:y:2001:i:8:p:509-515
    DOI: 10.1080/13504850010018743
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    1. Henrekson, Magnus, 1993. "Wagner's Law--A Spurious Relationship?," Public Finance = Finances publiques, , vol. 48(3), pages 406-415.
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